While Bob is in his gardening period he discovered two pairs of very well
connected positioned shortwave antennas, clearly a ham radio guys wet dream. Here is an outline of our discussion:

• • Size matters, cell phone antennas compared to shortwave station antennas
  • In comparison what does a microwave dish looks like
  • Bob’s discovery of a cell tower with no cell antennas, only shortwave, and microwave
  • Power meters tell no lies, only one entity is using this tower
  • Bob doing some dumpster diving and discovers something interesting
  • A box from a research company, not production parts used by the typical commercial enterprise, out comes the cell phone camera
  • Discovers the FCC registration number for some post discovery research as to who owns this tower
  • Although the power meter says US Cellular they abandoned the tower in 2012
  • A tower management company picked it up in 2014, and the current leaseholder didn’t bother to label meter with their corporate entity
  • Since there is a microwave dish, the FCC database coughed up who owned it and where it was pointed
  • The other link for the microwave transmission was the Aurora
  • Someone has a link from CME to this Microwave dish on this tower with shortwave radio antennas
  • So what was in the research cardboard box from FS Research?
  • We talked software defined radios
  • Wow someone is linking the CME to two locations somewhere on the other side of an ocean
  • So where were the antennas pointed?
  • One pair was set for London while the other was Frankfurt
  • So the intent was to connect CME to markets in London and Frankfurt
  • Bob found out who owns it, and he may end up working for them someday, so he decided not to reveal the specifics
  • Photons verses electrons in the race for speed
  • Photons through fiber travel about 2/3 the speed of light
  • Radio waves do move at the speed of light
  • Radio is the lowest latency between CME and London.
  • We dove into the three different types of radio, a line of sight (microwave), ground wave, and sky wave.
  • Microwaves bound by the height of the tower, the curvature of the earth, so 50 miles is the furthest you can go, over a large body of water.
  • AM radio is a ground wave, it follows the curvature of the earth as the radio waves follow the curve. Several hundred miles during the day, at night, potentially 1,000 of miles.
  • Skywave is what bounces off the ionosphere, also known as skip, and you can easily go around the globe
  • We talk about how these technologies can improve returns for the actual market makers trading on these different exchanges
  • Benefits of shortwave versus the disadvantages. A fiber was the first thing used for trading with distant markets
  • Shortwave is horribly unreliable, with very low bandwidth
  • Fiber is totally reliable, but 2/3 the speed of shortwave.

• The two gun analogy, using a fiber gun and a shortwave gun to gain the greatest advantage.
• Fiber can be millions of packets per second while the radio is thousands of times per second
• Shooters remorse, newer price right after sending a price
• Two gun analogy is the best way to move prices
• What about satellite
• Geostationary satellites, horrible latency as a result of the great distance they were from earth.
• Low Earth Orbit (LEO) satellites, much closer, but moving so you need to know where to look for them
• Also discussed Google and Elon Musk’s efforts to deploy balloons and new LEO efforts
• Shortwave is the lowest latency solution, but as discussed its horribly unreliable
• There will always be a business incentive for pushing the technology boundaries
• Surveys and bucket trucks, and Bob on his bike

Bob first presented his investigations at the Chicago STAC Summit in May 2018, and he will be again on June 13th at the STAC Summit in NYC. This podcast is for the benefit of those not able to see Bob in person.